Hi experts, a ULIP policy commenced on 8th sept. 2015 for a sum assured of Rs 14 lakh with an annual premium of Rs 2lakh for ten years got matured on 08th Sept. 2025 and the company deducted TDS u/s 194DA on maturity now my query is should I consider it as an LTCG or income from other sources. If I consider as income from other source then my tax liabilty will increase.
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Section 194DA
Replies (3)
Quick Summary
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Classification: Because your policy commenced in 2015 and the premium exceeded 10% of the sum assured, the maturity proceeds must be declared under Income from Other Sources (IFOS), not Capital Gains.
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Taxable Portion: Tax is levied at your applicable slab rate, but only on the net income (Maturity Amount minus Total Premiums Paid), rather than the gross maturity value. Ensure you claim credit for the 5% TDS deducted under Section 194DA when filing your ITR.
thank you sir, but the TDS deducted is 2%
Sir i have read somewhere that as per the Finance Act 2025 any ULIP whose maturity proceeds are not exempt under section 10(10D) is covered by section 45(1B) and taxed under the head capital gains.
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